Economic experts are urging comprehensive reforms to bolster the effectiveness of Cameroon’s Three-Year Integrated Import Substitution Plan 2024-2026.
The initiative, introduced by Head of State Paul Biya, aims to diminish the nation’s dependence on foreign imports by enhancing local production in sectors such as agriculture, manufacturing, forestry, and textiles. Henri Kouam, Executive Director of the Cameroon Economic Policy Institute, CEPI, emphasizes the necessity of prioritizing small and medium-sized enterprises, SMEs over state-owned entities. “Import substitution should focus on businesses that support consumer products,” Kouam asserts. “Larger firms have substantial financial needs that far exceed the available budget, making SMEs the optimal beneficiaries of this strategy,” he further stressed.
In addition to structural reforms, CEPI and the Nkafu Policy Institute highlight the critical need for robust enforcement of property rights to stimulate investment in local industries. The current bureaucratic complexities and high costs associated with land registration and business compliance deter entrepreneurs, particularly smallholder farmers, from committing to large-scale investments. Addressing these challenges, the Cameroon Employers’ Association, GECAM, and CEPI have successfully advocated for tax incentives in the 2024 Finance Law. These incentives include a three-year tax suspension for newly registered businesses and a reduction in value-added tax, VAT, on essential products, measures designed to create a more business-friendly environment.
At the 2024 Cameroon Investment Forum, CIF, in Douala, discussions underscored the economic imperative of reducing import reliance. Government data reveals that in 2022, Cameroon imported over 841,000 tons of rice at a cost of CFA 264 billion and 143,000 tons of palm oil worth CFA 57 billion. Experts contend that for the import substitution policy to succeed, it must be underpinned by substantial financial support and streamlined regulatory processes to transition the economy toward greater self-sufficiency. Despite these initiatives, significant obstacles persist. Célestin Tawamba, President of GECAM, points to land tenure insecurity as a major impediment. Without clear property rights and a simplified registration process, large-scale agricultural investments remain fraught with risk. Moreover, excessive bureaucracy and high administrative costs continue to burden SMEs, limiting their ability to capitalize on government incentives.
While the primary goal of import substitution is to boost domestic production, experts assert that it can complement Cameroon’s international trade agreements. A robust local manufacturing sector could enable Cameroon to export finished goods within frameworks such as the African Continental Free Trade Area, AfCFTA and the Economic Partnership Agreement, EPA, thereby enhancing the country’s competitive position in regional markets. The ultimate success of the import substitution plan hinges on the government’s commitment to implementing necessary reforms. As the 2024-2026 initiative progresses, continuous monitoring and adaptive policy measures will be essential to ensure that SMEs and local industries can thrive. By fostering a more supportive business climate, Cameroon aims to reduce its dependence on foreign imports and fortify its national economy in the coming years.
